Select a Wooden Handle and right-click it on the now hanging Loot Pignatta. You may have to do this quite a few times. If you manage to hit the Loot Pignatta it will break and scatter Candies across the ground.
These Candies must be picked up quickly or they will disappear. For this reason it may be best to break a Loot Pignatta with friends around to help.
Game Menu
Build (B) ⇒Buildings & Structures (B) ⇒Pignatta Pole (P)